The government plans to use stronger regulations to prevent
enterprises from exporting at "unreasonably low prices" in a bid to
ensure export growth.?
China's Ministry of Commerce yesterday released a draft
provisional regulation on investigation and penalties of
unreasonably low-priced exports.
The ministry said the move was aimed to "safeguard the normal
order of foreign trade, protect the rights of enterprises and avoid
the bad practices of unreasonably low-priced exports."
The move comes as China is put in the spotlight over dumping
allegations. ?
The regulation stipulates that any person, enterprise and
association in China can file complaints with the Ministry of
Commerce against others for low-priced exports.
Products will be regarded as being an "unreasonably low-priced
export" if sold at prices 2 percent lower than their average costs.
These costs refer to the total payment made for production,
management and sales.
An enterprise charged with exporting such goods could be fined
up to 30,000 yuan (US$3,750) or prohibited from exporting anything
for up to?a period of 12 months.
The previous regulation, which took effect in 1996, gives less
detail on the definition of low-priced exports and weaker punitive
measures.
Experts said the new regulation fills the void that the
country's Anti-Unfair Competition Law and the upcoming
Anti-monopoly Law had failed to address.
The new regulation is expected to help reduce anti-dumping cases
against China, said Zhou Shijian, a business expert with China
Association of International Trade. China was the most frequent
subject of anti-dumping investigations for the 11th year in a
row.
In 2005, 40 new anti-dumping measures and 55 new investigations
into allegations of dumping were directed at China, according to
statistics from the World Trade Organization. By the end of last
year dumping charges against China totaled 663.
Many Chinese companies used to compete with a low-price policy
which was likely to bring about dumping claims due to the lack of
efficient governmental monitoring. Zhou said if the new regulation
was enforced it would help to ease the low-price competition which
he described as "a cancer" in foreign trade.
"It takes time and the government must make up its mind (to
implement the enforcement of the regulation)," he said. "An
important step is to make the Ministry of Commerce and industrial
associations play a bigger role among exporters."
Zhou said an industrial association should not only supervise
the industry to avoid the bad practices of low-price competition
but also to help implement the new regulation.
The expert also noted that the fundamental way to guide
exporters?in changing their method of export growth was by
improving the quality and added-value of their products.
However, experts also pointed out that some problems remained
behind the new regulation.
For example, although the regulation is modeled on the World
Trade Organization's method of anti-dumping investigations there
are gaps in the ways of calculating the "normal value" of an
export, said a scholar with Chinese Academy of Social Sciences who
declined to give his name.
Since a number of countries do not regard China as a full market
economy they use the costs of a third country when calculating a
"normal value."
(China Daily May 12, 2006)
